Many online merchants use Shopify to process payments directly from their store. For most Shopify merchants, Shopify Payments can be an incredibly convenient and streamlined way to accept payments online. However, a suspended Shopify Payments status or a Shopify Payments account hold can be quite a shock for any online business owner. This can bring your business to a complete standstill and negatively impact your cash flow.
The reasons for suspension can be varied. You must understand what may have happened and how to proceed with the least disruption possible. In this post, we’re going to cover the most common reasons that Shopify Payments gets suspended or put on hold, and give you an action plan so you can quickly get your business moving again.
TL;DR
- Shopify Payments can be suspended if your business sells prohibited products or services, or if you engage in other actions that don’t follow Shopify’s policies.
- Risk triggers include a high chargeback rate, sudden volume increase, discrepancy in business information, and suspected fraud or abuse.
- A suspension can prevent you from receiving payments or cause you to wait to get paid, which can severely disrupt your cash flow.
- Shopify will email you explaining why your account was declined and which documents they need you to submit for review.
- Contact Shopify Support and correct any necessary issues (remove banned products, verify your identity, and resolve chargebacks).
- A merchant services provider like PayCompass can be a reliable alternative for businesses that don’t find Shopify to be a good fit.
What Does “Shopify Payments Suspended” Mean For Your Business?
A Shopify Payments account suspension occurs when your ability to take payments with Shopify’s integrated payment gateway is paused or terminated.
Suspension can occur for a number of reasons, from violations to security measures, with the immediate result that customers will be unable to pay directly on the Shopify store with the site’s payment processor.
Shopify Payments account holds can occur before an account is suspended or as a result of funds being frozen temporarily. While not being able to get paid may not be as disruptive as not being able to accept payments at all, it will still have a huge impact on the operations of your business.
A quick fix and response are required in either situation, and it’s important first to understand why this suspension happened.
7 Common Causes of Shopify Payments Suspension
Shopify, like all payment processors, is highly regulated and has a set of terms of service to protect itself, financial institutions, and consumers. These policies are the leading causes of a Shopify payments suspension. The following are the most common reasons:
1. Prohibited Products or Services
Selling goods or services that breach Shopify’s Acceptable Use Policy or Payment Terms of Service is another typical reason for Shopify payments suspension. Both policies detail precisely what is and isn’t permitted. Regulated items, illegal products, and high-risk services are frequently restricted, for example.
Business owners may unintentionally fall into these categories. They must ensure to review these policies as they can be updated. Selling CBD products, gun accessories, or certain types of adult content can result in immediate suspension.
2. High-Risk Business Activities
Even if the products or services aren’t on the prohibited list, some types of business are seen as “high-risk” by processors. These are often businesses that have a high volume of chargebacks, subscription businesses, or industries that are prone to fraud. If the business falls into one of these types, it may have frequent Shopify Payments account holds.
Shopify Payments, like most standard processors, has a certain risk tolerance. If the business exceeds their tolerance, they consider your business too risky to continue processing. This is not necessarily a reflection on the legitimacy of your business, but on the financial risk.
3. High Chargeback Rates
Chargebacks are a big red flag for any payment processor. This is when a customer contacts their bank to dispute a transaction that has been processed and has the funds returned to them. Some level of chargebacks is unavoidable, but a high rate of chargebacks is a strong indicator that the product is not well-received or that there is fraud and/or poor customer service.
A sudden spike in chargebacks or chargeback rates higher than industry standards can result in a Shopify payments suspension. Processors see high chargebacks as a liability and risk to their financials. Here’s what you need to know about Chargebacks and how to deal with them.
4. Unusually High Transaction Volumes or Sudden Spikes
As the business grows, large spikes in volume or amounts transacted that Shopify doesn’t understand can also potentially set off a security review. For example, if the Shopify account suddenly processes a far higher number of transactions or amount transacted than was seen on previous days, Shopify’s fraud detection tools may identify these as suspicious and potentially place the Shopify Payments account on hold to investigate further.
This is usually done to safeguard the account in case there is fraud happening. If the business is rapidly scaling up, the owners should make sure to get in touch with Shopify’s support team in advance, so they can explain this.
5. Mismatched Business Information or Verification Issues
Shopify Payments stores a lot of personal and business information upon account setup. If any information on the account is incorrect or mismatched, Shopify Payments can be suspended. For example, if any details don’t align with official records or those of third-party organizations, Shopify Payments may be held. The more information that is mismatched (business name, address, tax ID, beneficial owner information), the greater the chance of Shopify Payments becoming suspended.
Similarly, if Shopify requests additional documents (such as photo ID, business license, or bank statement) and the owner fails to provide them accurately, Shopify Payments may be suspended. It is important to have all the information up to date and filled out correctly.
6. Suspicion of Fraudulent Activity
Shopify’s fraud prevention teams and payment processors are the first line of defense against online fraud. If their advanced fraud detection algorithms detect patterns, transactions, or a series of events on the account that they find suspicious, they can suspend the account. This can include unusual spending, risky IP addresses, or chargebacks/Disputes
7. Violations of Shopify’s Terms of Service
Another way to get the payments suspended is by breaking the Shopify Terms of Service. This may not always be related to payments, but could instead be due to breaking other rules, such as intellectual property laws, or spamming.
Business owners should always ensure they are familiar with and comply with all of Shopify’s policies. Otherwise, they could be putting their whole business and payments at risk.
What To Do Next
If your Shopify payments got suspended, don’t panic. Follow the following step-by-step guide to restore your payment processing:
1. Review Your Email
Review the email account associated with your Shopify account. Shopify will, in 99.99% of cases, send you an email notification detailing exactly why your account was suspended. This email will be your guide for what to do.
Pay special attention to the specific reason given, policies cited, and any documents they may be requesting. This email should inform your next steps. In many cases, the problem is a simple one that can be corrected as soon as you know what triggered it.
2. Contact Shopify Support
As soon as you figure out the why (or if the email above isn’t clear), reach out to Shopify Support. Be ready to share your store URL and account information. Clearly state that your Shopify payments account has been suspended and that you require assistance in understanding and resolving the issue.
3. Understand the Specific Reason and Gather Documentation
Shopify support or the email you received should identify the specific reason for your suspension. Prepare to provide any requested information/documents based on this.
Depending on your particular situation, be prepared to:
- For Prohibited Products – Remove any products in your store that fall under the prohibited products umbrella
- For Verification Issues – Gather official forms of identification that match the information requested. This could include government-issued IDs, business licenses, utility bills, or bank statements
- For High Chargebacks/Fraud – Discuss your business practices, have any shipping confirmations handy, and possibly go over any additional fraud prevention you’ve since put in place.
Alternatives to Shopify Payments
If your Shopify Payments account has been suspended or placed on hold, it may be a signal that the processor is not a good fit for your business. This is especially true if your business is “high-risk” or if you are seeking more personalized support and stability.
This is where a specialized merchant services provider like PayCompass can step in. A specialized provider with dedicated underwriting and time to understand your business.
If you are a US-based business that has experienced Shopify account holds, we can be your solution moving forward. Our platform enables you to establish your own dedicated merchant account, providing greater control over your processing, more transparent pricing, and dedicated support from subject matter experts who are familiar with you and your business.
Account suspension doesn’t have to put a stop to your business growth. Use this as an opportunity to find a long-term partner that specializes in stability and scaling with a dedicated merchant services provider.
Final Thoughts
A Shopify payments suspension can be an inconvenience, but it doesn’t have to stop your business. Work to understand the cause of the suspension, act quickly on Shopify’s requests, and assess your store’s risk profile in order to begin remediation.
Shopify may not be a viable long-term solution if your business is considered high-risk or if you require more direct support, as it utilizes only one aggregated processor for all its merchants.
For a more stable payment environment with a dedicated merchant account and team that understands your business, contact PayCompass today. We work with legitimate U.S. businesses to find reliable processing solutions that fit their needs.
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